Legal Analysts

Showing posts with label COVID19. Show all posts
Showing posts with label COVID19. Show all posts

Thursday, August 26, 2021

Podcast: Interview with Attorney Suing Texas Governor over Mask Mandate Ban

On episode 205 of The Lieb CastWe bring on the Attorney who is representing the group of disabled children in Texas suing Governor Abbott over school mask mandate ban.  We predict the unraveling of several lawsuits to follow. Search "The Lieb Cast" on any podcast player. 

Monday, December 14, 2020

Commercial Eviction and Foreclosure Moratoriums Extended through January 31, 2021

Through Executive Order 202.81, Governor Cuomo extended the moratoriums for the initiation of a proceeding or enforcement of an eviction of any commercial tenant for nonpayment of rent or a foreclosure of any commercial mortgage for nonpayment of such mortgage to January 31, 2021. This means that no eviction or foreclosure proceeding may be commenced against commercial tenants for nonpayment of rent or mortgage until such date.

In addition, New York City’s Guaranty Law, which prohibits commercial landlords from enforcing personal guaranties against natural persons for payments during the COVID-19 period, was extended and now covers payments due from March 7, 2020 through March 31, 2021. The law was recently challenged in the United States District Court in the Southern District of New York for violating the Constitution, but the law was ultimately upheld. The Court reasoned that while the law does substantially impair contracts, the law is constitutional as it advances a legitimate public interest, and the law is reasonable and necessary in advancing such interest.

While commercial landlords may still seek relief by commencing a holdover eviction, landlords may be better off commencing an action in Supreme Court where they can seek damages for breach of contract, removal of the tenant through an ejectment action, and the enforcement of personal guaranties (for non-NYC landlords), if any. Landlords are advised to consult counsel to ensure compliance with the terms of the lease and all landlord-tenant laws currently in place to avoid any delays and additional damages.

There are currently no moratoriums in place for residential evictions. Residential landlords may commence both holdover and nonpayment proceedings. However, for nonpayment proceedings, courts may not grant a judgment of possession and warrant of eviction against tenants in a nonpayment proceeding who raise the affirmative defense of a COVID-19 financial hardship and proves same. Further, tenants who submit a CDC declaration form stating their inability to pay rent, among others, to their landlords are also protected from nonpayment eviction proceedings until December 31, 2020.

Tuesday, November 24, 2020

Stop Speculating about Mandatory Vaccines. The Law is VERY Clear!

There is an EXPLOSION of 2 fundamental rights: Personal freedom and societal regulation. On #theLIEBCAST podcast, we review the substantive due process right to personal liberty and public health.

We look at a previous case from the 1905 smallpox public health crisis and discuss religious and disability exemptions. We discuss how the government has historically limited our liberties in regard to the safety of water quality, transportation, sewage and disease control. What does the country need to get herd immunity from COVID19 and get back to a new normal? #ListenToLieb

Wednesday, September 02, 2020

CDC's Residential Eviction Moratorium - Fines up to $500,000 and Jail - You Better Read This

CDC's eviction moratorium has teeth and the details matter. 

CDC issued an Agency Order, under the Public Health Service Act, to temporarily halt residential evictions to prevent the further spread of COVID-19 through December 31, 2020. 

The Order applies to residential tenants (not transient or "seasonal tenant[s]") who have provided an executed and sworn copy of the Declaration form, set forth in Attachment A of the Agency Order, to their landlord. 

Such Declaration swears that:
  1. The individual has used best efforts to obtain all available government assistance for rent or housing;
  2. The individual either (i) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
  3. the individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;
  4. the individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses; and 
  5. eviction would likely render the individual homeless—or force the individual to move into and live in close quarters in a new congregate or shared living setting—because the individual has no other available housing options.
Landlords and tenants alike better get this right as DOJ can bring actions against violators and "a person violating this Order may be subject to a fine of no more than $100,000 if the violation does not result in a death or one year in jail, or both, or a fine of no more than $250,000 if the violation results in a death or one year in jail, or both, or as otherwise provided by law." If the violator is an organization, the fines are $200,000 and $500,000, respectively. 

This does NOT mean that landlords DON'T have rights.

It is expressly noted that "[t]his Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract." Nor does the order preclude "the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis..." As we just wrote in Dan's Papers - Sue the Tenant for a Judgment

Finally, it is noted that the Order does not prevent evictions "for reasons other than not paying rent or making a housing payment" nor does it preclude "foreclosure on a home mortgage."

As an aside, the CDC is justifying this Order by pointing to the "over 174,000 deaths due to the disease" and comparing it "to the peak mortality observed during the 1918 H1N1 influenza pandemic," while asserting that "eviction moratoria-like quarantine, isolation, and social distancing-can be an effective public health measure utilized to prevent the spread of communicable disease." Perhaps we should stop downplaying this pandemic - it is real per Trump's Federal Agency. 

Monday, June 29, 2020

NY | How to Reopen Your Business

Reopening isn’t just going back to work – there are 5 steps that businesses must take to open their doors if they want to avoid legal troubles.

Step 1. Review the applicable guidance for reopening & affirm that you will comply.

Each industry has tailored guidelines from NYS DOH, which represents the minimum requirements for you to reopen.
Before you open your doors, you MUST affirm that you have read the guidelines at this link.
Guidance for your industry can be located here.

Step 2. Formulate a business safety plan.

Each business MUST develop a written safety plan to prevent the spread of COVID.

The plan must be retained on the premises of the businesses and made available for inspection by DOH or your local health and safety authorities (zoning) upon request.

The sample plan provided by NYS is 7 pages long and includes a daily mandatory health screening assessment for employees and essential visitors, a requirement to record a log of all those physically present at the premises, cleaning requirements, and much more.

Start writing your plan now in compliance with the law if you plan to reopen.

Step 3. Create logbooks to comply and maintain policies.

You need to create forms to implement your plan. You need the health screening assessment developed, a logbook for cleaning, and a logbook for visitors. These can be inspected by DOH and other authorities so they better exist before you open your doors.

Step 4. Floor markings and PPE.

You are required to provide your entire team with PPE so it’s time to start ordering supplies yesterday. Plus, you need to place signage and floor markings throughout your premises to maintain proper social distancing. So, take out your tape and measuring stick to get going.

Step 5. Craft your message.

Your team and your customers need to understand your plan and how it impacts them, or they won’t follow it. So, you need to create a message, start getting it out there via email and make it available to everyone at your business. This message must explain your safety plan and the new policies that you will enforce for the rest of COVID. Getting buy-in is the key to proper implementation and protecting you from suit and negative PR.

Friday, June 05, 2020

US Senate Sends "Paycheck Protection Program Flexibility Act" to President Trump's Desk

Major revisions to the Paycheck Protection Program are on the way. The "Paycheck Protection Program Flexibility Act" amends the portion of the CARES Act that established the PPP. The changes are intended to make forgiveness of PPP loans more achievable for a greater number of businesses. Major changes include:
  1. 5 Year Maturity Date on Unforgiven Loan Amounts. Any portion of a PPP loan that is not forgiven is now subject to a minimum maturity date of five (5) years, up from two (2). 
  2. Payroll Tax Deferral. PPP borrowers can defer 50% of their share of payroll taxes to 2021 and the remaining 50% to 2022. 
  3. Expanded Forgiveness Period. What was an eight (8) week forgiveness period has been expanded to twenty-four (24) weeks from the origination of the loan or December 31, 2020, whichever comes first. 
  4. More Non-Payroll Expenses. Up to forty percent (40%) of the loan can now be used for non-payroll expenses and still be forgiven. A new SBA rule may be required as existing SBA rules say only twenty-five percent (25%) of PPP funds may be used for non-payroll expenses. 
  5. Full Employment Period Extension. Borrowers are now required to return to February 15, 2020 levels of full time employment by December 31, 2020 instead of June 30, 2020. 
  6. Full Employment Level Exceptions. Borrowers who are unable to restore their full time employment to February 15, 2020 levels can make use of two new exceptions - if they cannot find qualified employees for unfilled positions, or if their business activity is reduced due social distancing requirements, capacity limitations, or other similar restrictions in place for employee and customer safety. 
Keep an eye out for new SBA rules once President Trump signs this bill into law. If you already have a PPP loan, inquire with your lender to see how they will handle the material changes to your promissory note that this bill requires. 

Tuesday, May 26, 2020

Courts to Begin Limited In-Person Operations on Long Island

On May 18, 2020 the New York State Court System resumed limited in-person operations in upstate counties. Today Chief Judge Janet DiFiore announced that in-person operations will expand to Dutchess, Orange, Putnam, Rockland and Westchester Counties on May 27, Ulster and Sullivan Counties on May 28, and Nassau and Suffolk County on May 29. 

These re-openings are consistent with Phase 1 re-opening guidelines set by the Governor's Office and can be expanded as Phase 2 and further guidelines are met. 

Phase 1 operations permit judges, chambers staff, and some other limited personnel to return to their physical offices while operating in a manner consistent with current health and social distancing guidelines. Public in-person appearances will be limited to filings of emergency applications and the adjudication of matters that were previously identified as essential. In-person appearances for non-emergency and non-essential matters will be deferred to the courts' expanded virtual capabilities. 

Our court system is more capable than ever. Virtual conferences and the clearing of pending motions has put the courts in a position to handle the influx of new cases that will be filed now that non-essential matters can be commenced and in-person operations are returning. Chief Judge DiFiore has signaled that the expanded use of virtual court operations will be maintained by the courts for the foreseeable future as courthouses look to push as many public visitors as possible away from its doors and onto their computers screens. 

The Court System's official press release can be found HERE. The transcript of Judge DiFiore's latest message can be found HERE. A summary of the current state of online and in-person operations can be found HERE.

Wednesday, May 20, 2020

New York Courts Opens Electronic Filing of New Non-Essential Matters

Beginning May 25, 2020, litigants will finally be able to commence new actions. The acceptance of electronic filing for new non-essential matters represents the clearing of the the penultimate hurdle for the court system's remote operations. In effect, trials and hearings are the only civil court operations still on hold. Judge Marks May 20, 2020 memorandum can be found, HERE

It is important to remember that this memorandum does not supersede the Governor's executive orders which restrict certain actions, such as residential evictions, which may still be barred. 

Friday, May 08, 2020

Governor Cuomo Tolls Statute of Limitations to June 6, 2020

Governor Cuomo has signed a new executive order extending many of the previous actions taken in his previous orders. Included among these extensions is the tolling of statute of limitations until June 6, 2020. This is necessary, of course, because litigants are still prohibited from filing new non-essential actions. Litigators should be aware that this does not toll all deadlines in pending and ongoing actions. Notices of appeal, motion deadlines, time to answer and appear, and discovery deadlines are all up and running with the courts' expanded remote operations. Additionally, statute of limitations on federal claims are not affected as federal courts remain fully operational. A copy of the executive order, No. 202.28, can be found HERE

Stay tuned to our blog for big changes to the current commercial and residential eviction moratorium. 

Tuesday, April 07, 2020

Penalties for Violating Executive Orders on Coronavirus Expanded AGAIN

By Executive Order 202.14, Governor Cuomo enacted new penalties for violating Coronavirus Executive Orders, in addition to what we discussed in our blogs - Penalties for Keeping Your Real Estate Opened in Coronavirus Expanded and What Happens When You Ignore the Essential Services Executive Order

The new penalty order states as follows:
The enforcement of any violation of the foregoing directives on and after April 7, 2020, in addition to any other enforcement mechanism stated in any prior executive orders, shall be a violation punishable as a violation of public health law section 12-b(2) and the Commissioner of Health is directed and authorized to issue emergency regulations. The fine for such violation by an individual who is participating in any gathering which violates the terms of the orders or is failing to abide by social distancing restrictions in effect in any place which is not their home shall not exceed $1,000.
You've been warned. 

Saturday, March 28, 2020

Evictions Stopped Under Coronavirus Stimulus - CARES Act

The Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law on March 27, 2020. In addition to the relief enumerated in two of our recent articles (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package and Forbearance and Foreclosure Moratorium in Coronavirus Stimulus), the CARES Act also provides relief to residential tenants.

Under the CARES Act, from March 27, 2020 to July 25, 2020, landlords of 1- to 4-family and multifamily (5 or more) properties with FHA, Fannie Mae, or Freddie Mac mortgage loans may NOT:
  • Initiate a legal action to recover possession based on nonpayment of rent or other fees or charges;
  • Charge fees, penalties or other charges related to the nonpayment of rent;
  • Require the tenant to vacate with less than 30-days’ notice; and
  • Issue the 30-day notice to vacate until after July 25, 2020.
In addition, landlords who obtain a forbearance on their multifamily mortgage due to a financial hardship caused by the COVID-19 outbreak are prohibited from doing the above before their forbearance period expires.

Forbearance and Foreclosure Freeze in Coronavirus Stimulus

On March 27, 2020, the historic stimulus package known as the Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law.

In addition to the relief enumerated in our recent blog (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package), the CARES Act also includes mortgage relief in the form of forbearance periods and foreclosure moratoriums for federally backed mortgages on 1-4 family homes and multifamily (5 or more) homes.

Which mortgages are covered?
  • Federally backed mortgage loans secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) for 1- to 4-families and for on multifamily residential real property (5 or more dwelling units) are covered, these include loans:
  • insured by the Federal Housing Administration;
  • insured under section 255 of the National Housing Act;
  • guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992;
  • guaranteed or insured by the Department of Veterans Affairs;
  • guaranteed or insured by the Department of Agriculture;
  • made by the Department of Agriculture; or
  • purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae).

What relief is available? 
For 1-4 family properties:
  • Forbearance period of 180 days, which may be extended for an additional 180 days, upon the borrower’s request;
  • No late fees, interest, or penalties during the forbearance period beyond those scheduled or calculated as if borrower is current on the mortgage; and
  • Foreclosure moratorium – servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020;
For multifamily properties
  • Forbearance period of 30 days, which may be extended for up to 2 additional 30-day periods, upon the borrower’s request. Note that the forbearance is only applicable to multifamily mortgage loans that were current on payments as of February 1, 2020. Also, tenants may not be evicted nor issued a notice to vacate for nonpayment or late payment of rent during the forbearance period.
  • Foreclosure moratorium: servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020. 

What is the process for requesting a forbearance?
  • For 1-4 family properties: Requests for a forbearance may be made by submitting a borrower’s attestation to a financial hardship caused by the COVID-19 emergency. No other documentation is required for the initial 180-day forbearance to be granted.
  • For multifamily properties: Requests for a forbearance may be submitted to the servicer orally or in writing, through an affirmation that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.

Friday, March 27, 2020

Penalties for Keeping Your Real Estate Opened in Coronavirus Expanded

By Executive Order 202.11, Governor Cuomo enacted new penalties, in addition to what we discussed in our blog - What Happens When You Ignore the Essential Services Executive Order, if you keep your real estate open in violation of an Executive Order.

The new penalty order states as follows:
During the period when an Executive Order limiting operation of a type of facility or limiting the number of persons who may occupy any space is in effect, any operation of such a facility or occupancy of any such space by more than the number of persons allowed by said Executive Order shall be deemed to be a violation of law and in particular, but not by way of limitation, shall be deemed to be a violation of the Uniform Code or other local building code in effect in the jurisdiction in which the facility or space is located. In the event of any such violation, any state, county, or local police officer authorized to enforce laws within the jurisdiction in which the space or facility is located is authorized to remove persons from such space or facility. In addition, in the event of such violation, any state, county, or local code enforcement official or fire marshal authorized to enforce the Uniform Code or other local building code within the jurisdiction in which the facility or space is located is authorized to issue an appearance ticket, a Notice of Violation, an Order to Remedy such violation, which shall require immediate compliance, and/or a Do Not Occupy Order to any owner, operator, or occupant of any such facility or space. Nothing in this provision shall limit the authority of any governmental unit or agency to take such other and/or additional enforcement actions to the extent necessary to ensure compliance with such occupancy-related directives or facility operation-related directives.
 As such, here is your exposure:

  • Charge of "violation of law"
  • Charge of "violation of the Uniform Code or other local building code"
  • Removal by police
  • Receipt of an appearance ticket, Notice of Violation, and/or Order to Remedy
  • Receipt of a Do Not Occupy Order to the "owner, operator, or occupant of any such facility or space"
Oh, by the way, you are KILLING people. So, stop it and close when you are ordered to close.

The end.

Wednesday, March 25, 2020

NYS 90-Day Mortgage Relief Plan – DFS Regulation Issued

On March 24, 2020, the details of NYS’ COVID-19 mortgage help came to light.

Specifically, the New York State Department of Financial Services promulgated 3 NYCRR 119 in response to Governor Cuomo’s Executive Order 202.9.

Here is a Q&A about the details

What is the COVID-19 Relief Program?
The COVID-19 Relief Program requires DFS regulated institutions to make applications for a 90-day forbearance of any payment due on a residential mortgage of New York Property to individuals residing in New York and who demonstrates financial hardship as a result of the COVID-19 pandemic.

How long is the Program effective?
The Program shall be in effect until June 19, 2020, but may be extended if necessary.

Are mortgage payments waived under the Program?
The Program does not expressly require institutions to waive mortgage payments.

When can a borrower apply for the Program?
On or before April 3, 2020, regulated institutions are required to e-mail, publish on their website, mass mail, or broadly communicate to customers how to apply for COVID-19 relief and provide their contact information.

Which institutions are covered under the Program?
DFS-regulated institutions are covered under the Program. They are New York regulated banking organizations covered by the New York Banking Law and all New York regulated mortgage servicers regulated by DFS. This means that the program does not cover National Association lenders (federally charted banks). The Program does not apply to mortgage loans made, insured, or securitized by the United States, Government Sponsored Enterprise, Federal Home Loan Bank, and lenders, issuers, servicers or trustees of such loans, as well as, servicers for the Government National Mortgage Associations.

Does the Program cover commercial loans?
The Program does not apply to any commercial mortgage or other loans not described in 3 NYCRR 119.

Aside from a 90-day forbearance, is there additional relief available under the Program?
From today until June 19, 2020, or until extended, lenders will provide the following relief to individuals who experience financial hardship from COVID-19:
  • Waive fees for use of automated teller machines (ATMs);
  • Waive overdraft fees; and
  • Waive credit card late payment fees.
Institutions are not limited to offering the above types of relief and are encouraged to take additional reasonable and prudent actions to COVID-19 affected individuals.

Who is qualified to receive COVID-19 relief?
Regulated institutions must develop their own clear, easy to understand, and reasonably tailored criteria for assessing qualified individuals. The qualifications and process for applying for relief should be published by institutions on or before April 3, 2020.

How are applications processed under the Program?
Regulated institutions are required to develop and implement procedures for expedited processing where they must process and respond to requests immediately and no later than 10 days of receipt of all information reasonably required to process the application. All determinations must be communicated to the applicant in writing and must explain the reasons if the application was denied and a statement that the applicant may file a complaint with DFS if he believes the application was wrongly denied.

Is the Program ready to launch?
More clarity concerning the Program is expected once regulated institutions have published their process for applying for relief. Individuals who are seeking mortgage assistance as a result of the COVID-19 pandemic are encouraged retain counsel as soon as possible to negotiate with their mortgage lenders or servicers. Don’t assume you qualify and get all terms in writing before you stop making mortgage payments.

Tuesday, March 24, 2020

Coronavirus in Your Multi-Family / Commercial Building

If you learn that someone is infected with Coronavirus in a unit, do not notify other tenants or conduct cleaning.

Instead, contact your local (County / City) and follow their guidance. Do nothing else.

You are ill-equipped to create a protocol and may further injure your tenants by acting imprudently.

There are privacy concerns, cleanliness concerns, isolation concerns, testing concerns and the like.

Therefore, if you learn of a positive diagnosis in your property, contact your local health department and follow their guidance.

Monday, March 23, 2020

NYS Mortgage Relief Plan – Guidance from DFS

Following Governor Cuomo’s announcement on a 90-day mortgage relief plan for borrowers affected by the novel coronavirus (COVID-19), the New York State Department of Financial Services (DFS) issued Guidance to regulated financial institutions concerning its implementation. The Guidance urges all regulated financial institutions to do their part in curtailing the effects of COVID-19 on consumers and small businesses by:
  • Waiving overdraft fees;
  • Providing new loans on favorable terms;
  • Waiving late fees for credit card and other loan balances;
  • Waiving automated teller machine (ATM) fees;
  • Increasing ATM daily cash withdrawal limits;
  • Waiving early withdrawal penalties on time deposits;
  • Increasing credit card limits for creditworthy customers;
  • Offering payment accommodations, such as allowing loan customers to defer payments at no cost, extending the payment due dates or otherwise adjusting or altering terms of existing loans, which would avoid delinquencies, triggering events of default or similar adverse consequences, and negative credit agency reporting caused by COVID-19 related disruptions;
  • Ensuring that consumers and small businesses do not experience a disruption of service if financial institutions close their offices, including making available other avenues for consumers and businesses to continue to manage their accounts and to make inquiries;
  • Alerting customers to the heightened risk of scams and price gouging during the COVID-19 disruptions, and reminding customers to contact their financial institutions before entering into unsolicited financial assistance programs; and
  • Proactively reaching out to customers via app announcements, text, email or otherwise to explain the above-listed assistance being offered to customers.

Regulated financial institutions are also urged “to work with and provide accommodations to their borrowers during this unprecedented global emergency to the extent reasonable and prudent.” This includes holding off on taking adverse action for defaults. Regulated financial institutions include mortgage bankers, mortgage loan servicers, banks and trust companies, among others. For a full list of DFS-regulated financial institutions, click HERE.

While the efforts of DFS and New York State are definitely acknowledged and appreciated, Borrowers should be aware that the Guidance is simply that, guidance. The Guidance does not legally require financial institutions to take the above-listed actions and only encourages them to do so.

Stay tuned for more updates from New York State and DFS as to specific procedures on the NYS mortgage relief plan.

County Clerks and Court Clerks Forbidden From Accepting Filings

The Chief Administrative Judge of the Courts has issued an order forbidding the filing of all non-essential papers in county clerks and court clerks. This order is statewide and will have far-reaching consequences.

The Order, a copy of which can be found HERE, states:

Pursuant to the authority vested in me, in light of the emergency circumstances caused by the continuing COVID-19 outbreak in New York State and the nation, and consistent with the Governor of New York's recent executive order suspending statues of limitation in legal matters, I direct that, effective immediately and until further order, no papers shall be accepted for filing by a county clerk or a court in any matter of a type not included on the list of essential matters attached as Exh. A. This directive applies to both paper and electronic filings.

Follow the link above to find a list of essential matters, most of which focus on the protection of the life, safety, and well-being of people.

The consequences of this Order are profound. For example, the Suffolk County and Nassau County clerks were both operating on a limited basis, but were still operating. The State's electronic court filing system was still accepting filings which enabled parties to continue litigating so long as it didn't require judicial intervention. New York County's online recording system, ACRIS, was still accepting electronic filings. Based on the wording of this Order, all of that ends today.

Despite this Order, Lieb at Law will proceed with our litigation matters to the maximum extent possible - as long as it doesn't require judicial intervention, we will push forward.

Look for a blog from Steven Siliato later today detailing the effects this Order will have on real estate transactions. Title examination? Race notice recording? GAP title insurance?

Governor Cuomo Issues Statewide Moratorium on Commercial and Residential Evictions and Foreclosures

Governor Cuomo has consolidated the patchwork of local foreclosure and eviction laws bubbling up in the wake of the COVID-19 quarantines - and it's a big one.

There shall be no enforcement of either an an eviction of any tenant, residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days. 

Ninety days from the date of the Order puts us out to June 18, 2020.

One noteworthy aspect of this Order is its application to both residential and commercial properties. 

It is vital to note, however, that this does not mean you cannot be in default of your rent or mortgage for the ninety day period. It simply states that there shall be no enforcement of evictions or foreclosures. If you are delinquent on your rent or mortgage during the term of this order, your landlord or lender could commence an eviction or foreclosure proceeding after the order expires. 

The interplay of this Executive Order with Executive Order 202.9 (see our prior blog about that, here) creates an opportunity for borrowers to leverage a forbearance with their lender ensuring that they are not delinquent on their mortgage on June 18, 2020. 

Saturday, March 21, 2020

NYS Mortgage Relief Plans Becomes Clearer, BUT Not Enough

On March 21, 2020, the Governor issued NYS Executive Order 202.9, which provides, in pertinent part, as follows:
Subdivision two of Section 39 of the Banking Law is hereby modified to provide that it shall be deemed an unsafe and unsound business practice if, in response to the COVID-19 pandemic, any bank which is subject to the jurisdiction of the Department shall not grant a forbearance to any person or business who has a financial hardship as a result of the COVID-19 pandemic for a period of ninety days... The Superintendent of the Department of Financial Services shall ensure under reasonable and prudent circumstances that any licensed or regulated entities provide to any consumer in the State of New York an opportunity for a forbearance of payments for a mortgage for any person or entity facing a financial hardship due to the COVID-19 pandemic. The Superintendent shall promulgate emergency regulations to require that the application for such forbearance be made widely available for consumers, and such application shall be granted in all reasonable and prudent circumstances solely for the period of such emergency. 
While a cursory reading shows that mortgage help is on the way, many uncertainties remain, including:

  • What does subject to the jurisdiction of the Department mean in the Order? Specifically, there are two charting systems for banks; federal and state. The Federal Office of the Comptroller of the Currency controls federally chartered banks pursuant to the National Bank Act. Generally, you can tell that a bank is federally chartered because it has the initials N.A. after its name. As a result, NYS doesn't have jurisdiction over federally chartered banks so how does this work if you have a loan through a federal bank like many NYS residents do?
  • When is the Superintendent promulgating emergency regulations and how are consumers going to understand those regulations if attorneys at law were not labeled as essential services under the quarantine and therefore are becoming less available by the minute? Yes, some law firms are open and working remotely, but for how long with many clerks' offices closed and all court deadlines tolled (yesterday's Executive Order 202.8), including "any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding."
  • By adding the words business & entity, is it intended that this applies to both residential and commercial property?
  • Is there a limit on the amount of the mortgage for this to be applicable?
  • After the forbearance is over, what happens to the money deferred (i.e., back end balloon, recapitalized, ballooned immediately, something else)?
  • Will the Superintendent of DFS be answering these questions or someone else; plus, will the answers be part of a regulation or just advisory? 
Please don't misunderstand this post. We 100% support the quarantine and also support the forbearance. Instead, this blog is designed to prevent further hardship to the vulnerable who take a leap of faith on their mortgage without first researching facts.

Get facts before you act and the facts aren't out yet - so, CONTINUE PAYING YOUR MORTGAGE for now.

Friday, March 20, 2020

NYS, FHA, Fannie Mae and Freddie Mac Mortgage Relief Plans Do Not Automatically Waive Mortgage Payments

On March 19, 2020, Governor Cuomo announced a 90-day Mortgage Relief Plan ("Plan") for New York State mortgage borrowers. New York State mortgage servicers are directed to provide 90-day mortgage relief to borrowers affected by the novel coronavirus (COVID-19). The Plan aims to provide the following relief:
  • Waiving mortgage payments based on financial hardship;
  • No negative reporting to credit bureaus;
  • Grace period for loan modification;
  • No late payment fees or online payment fees; and
  • Postponing or suspending foreclosures.
While the Plan does bring immediate relief to homeowners affected by the coronavirus (COVID-19), the Plan does not simply waive mortgage payments due in the next 90 days. In his press conference, Governor Cuomo clarified, "We're not exempting people from the mortgage payments. We're just adjusting the mortgage to include those payments on the back end."

Currently, specific procedures on how to apply and/or how to qualify under the Plan is yet to be published, so stay tuned. Until then, borrowers should retain counsel to apply and negotiate with their mortgage lender or servicer for a forbearance plan to prevent incurring interest and fees for missed payments.

Mortgage relief plans are also in place for FHA, Fannie Mae, and Freddie Mac mortgages. Similar to New York State's Plan, however, borrowers should be aware that the mortgage payments are not automatically waived nor placed on hold and they should retain counsel to apply and negotiate with their mortgage servicer immediately.